Danish housing market still going full steam ahead

Housing prices may cool off in the second half of 2015 (photo: iStock)

August 10th, 2015 3:43 pm| by Christian W

Despite talks of impending housing bubbles and what not, the Danish housing market continues to forge full steam ahead.

Over the past year, the price of apartments has increased on average by 10 percent, while houses have shot up by 7 percent on average.

“Since a low point in 2011, nominal housing prices have risen by about 18 percent in three and a half years, while apartments have gone up by 38 percent,” said Bo Sandberg, the chief economist for construction advocacy organisation Dansk Byggeri.

“However, apartments also endured a bigger price dip than regular houses during the financial crisis.”

A more subdued end to 2015
The prices are rising the quickest in the capital, but the trend has spread to housing in every region of Denmark, and speculation is rife that a new housing bubble could be on the horizon.

However, Dansk Byggeri contends that with at least 10,000 new citizens moving to Copenhagen every year, the high housing demand in the capital is still primarily demographically driven and less so speculatively.

Dansk Byggeri maintains the recent increase in interest rates could lead to more conservative housing price growth rates in the second half of 2015, while the improving Danish economy could pull in an adverse direction.